DeFi only on Ethereum? Projects on other blockchains
Although Ethereum is by far the most used blockchain for decentralized finance, there are also DeFi projects on other blockchains. In fact, Ethereum is not the only one that allows the development of smart contracts, or decentralized finance tools, to the extent that among the first 24 projects in terms of volume of locked funds, on defipulse.com, there is at least one that is not based on Ethereum.
Lightning Network, based on the Bitcoin blockchain, is in the eleventh position with $7 million in BTC locked. To be honest, Lightning Network is only a payments network for now, without other major decentralized finance services, but since it allows the development of such tools, it is considered as a DeFi platform. It is certainly a decentralized platform, but so far not particularly developed from a financial point of view, since there are still no relevant financial services based on LN.
Technically all the blockchains that support smart contracts are usable for DeFi dApps, but the three most competitive blockchains from this point of view, for now, seem to be Ethereum, EOS, and Tron. Even XRP allows the creation of financial instruments, but there are doubts about its actual decentralization. In fact, all the main financial instruments based on XRP have in fact been developed by Ripple, which is a private company and therefore not decentralized, so generally, these instruments are not considered part of the DeFi world.
Binance Chain, Tezos, Stellar and Neo also allow the development of DeFi tools, but to date, they are not being developed as on the aforementioned blockchains. There are actually many other blockchains that can allow the creation of DeFi tools, such as Cardano and Ethereum Classic. Even the Chainlink blockchain is widely used in the DeFi industry, but as a support for projects based on other blockchains.
On defi.dapp.review for example, among the top 27 dApps, there are three that are not based on the Ethereum blockchain: Lightning Network, EOSREX and EOSDT.
Obviously, LN is based on the Bitcoin blockchain, while the other two are based on EOS.
EOSREX
EOSREX is an interface for the REX smart contract that runs on EOS and allows to lend EOS to a liquidity pool to earn a share of the revenue generated by the pool, or to borrow CPU and NET resources for 30 days.
It is actually a real market for the rental of CPU and NET resources, where holders of the blockchain’s core token can buy and sell sections of the REX pool in the form of REX tokens. On EOSREX an EOS token owner can lend their CPU/NET resources by buying REX tokens, and in order to do so, they must transfer EOS tokens to a REX Fund account, which can then be used to buy REX tokens.
The EOS added to the pool are used to delegate CPU/NET bandwidth to those who choose to rent them for renewable periods of 30 days, and the rent is payable in EOS by the borrower.
EOSDT
EOSDT, on the other hand, is a stablecoin similar in some ways to DAI, i.e. its value is pegged to the US dollar, but with EOS as the collateral. It is used to increase market liquidity and is over-collateralized at 130%. Like DAI, the issuance is based on loans, thus guaranteeing EOSDT lenders an interest income. On the dapp.com ranking, in the Finance section, there are many other financial dApps, which can be considered to all intents and purposes as DeFi instruments.
To be honest, decentralized exchanges (DEX) are often also considered as DeFi instruments, but they generally only offer their users the possibility to exchange tokens. Only in some cases do they offer real financial services, such as margin trading or leverage. Among the major financial dApps on dapp.com, there are several that are not based on the Ethereum blockchain, including some that are not necessarily well known.
There is also PIZZA-USDE, based on the EOS blockchain, a two token stablecoin system that allows users to generate USDE stablecoins with a value pegged to the US dollar. In many ways, it is similar to EOSDT.
A DeFi platform based on the TRON blockchain is Zethyr Lending, which allows users to lend and borrow TRX. It works similar to many other decentralized lending platforms, except that in this case it is based on TRON’s blockchain and the TRX cryptocurrency.
There are also two platforms based on the TomoChain blockchain, TomoMaster and TomoPool.
- TomoMaster is TomoChain’s governance dApp, and TomoPool is a staking pool for TomoChain.
- Whereas Liebi Pool is a staking pool for the IOST blockchain which generates compound interests.
EOS-based dApps also include VIGOR, a stablecoin, Paytomat, for payments, Chintai, a lending platform, and Acueos. The latter is a protocol for the EOS blockchain based on Compound Finance, i.e. for decentralized lending.
MinnowBooster, on the other hand, is based on Steem’s blockchain and is a marketplace for leasing Steem Power delegations, allowing delegates to connect with users who wish to rent Steem Power to promote their posts or improve their status on Steem.
There are actually other minor financial dApps not based on Ethereum on dapp.com, and they are generally based on EOS or Tron. The ecosystem of Binance Chain-based dApps deserves a separate mention, for which it is very difficult to find data. In a Binance Research report of June 2019 dedicated to DeFi, not only no dApp is mentioned, but neither is Binance Chain.
There are many DeFi projects that are being created on Binance Chain which are different, starting from Binance DEX, however, perhaps because of some doubts about the real decentralization of this blockchain, there aren’t many DeFi developers who choose it as the foundation for their decentralized tools.
To the extent that the Binance Research report on DeFi only mentions three blockchains, namely Ethereum, EOS and Bitcoin. Finally, it should be pointed out that the dominance of Ethereum in DeFi is very powerful, and may even increase in the future. In fact, with the exception of those DeFi projects based on other blockchains that are actually at the service of the same, such as stablecoins, it is possible that the high interoperability of DeFi tools within the Ethereum ecosystem greatly favours the latter, which is becoming a unique reference point for decentralized finance. To date, it is very difficult to imagine that this dominance could be called into question.
